Share Review - JSW Steel

JSW Steel reported net loss of  Rs. 669  cr in 2Q FY 2012 at a consolidated level on
account of exceptional losses.
The JSW Steel had reported better than expected standalone numbers for 2Q FY 2012 on October 21, 2011.

Consolidated net sales grew by 37.7% yoy to Rs. 8,134 cr (slightly above of our estimate of Rs. 7,748 cr). Net sales growth was driven by in creases in standalone steel volumes (18.9% yoy to
1.9 mn tonnes) and realization (14.6% yoy to Rs. 42,831/tonne).

Consolidated EBITDA in creased by 36.6% yoy to Rs. 1,383 cr. The company reported exceptional
items related to forex loss of Rs. 513 cr and loss from JSW Ispat (associate company)
of Rs. 612 cr during the September quarter.

Consequently, JSW Steel reported net loss of Rs. 669 cr in 2Q FY 2012 compared to net profit of Rs. 373 cr in 2Q FY 2011 at a consolidated
level. However, adjusted net profit, excluding exceptional items, in creased by
35.5% yoy to Rs. 506 cr (higher than our estimate of Rs. 334 cr).

JSW Steel’s US subsidiary produced 0.10 mn tonnes of plates and 0.02 mn tonnes of pipes. The
company reported EBITDA of US $6.4 mn during the  September quarter.

JSW Steel’s Chilean mine shipped 0.15 mn tonnes of iron ore and earned EBITDA of US $7.2 mn.
Recommend Accumulate on the stock with a target price of Rs. 699
Review By Angel Broking

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